Film investment scammers promising 300% return

Film investment scammers promising 300% return

These scammers reckon I can make a 300% return from this film investment.

Tony Levene

Rights, Scams and Politics

Tony Levene
Updated on 13 September 2014

There's a photo of George Clooney, a portrait of Leonardo DiCaprio, and one of Russell Crowe. One more click of your mouse takes you to a picture of Daniel Craig.

You don't have to be much of a film fan to know that these are four of the biggest names in Hollywood. A movie starring any of them is guaranteed to fill your local multiplex.

So imagine what would happen when all four are in the same production, as a recent email implies! What script would show all of this quartet at their very best? And who would be the top billed star, whose publicist would arrange the juciest magazine interviews and in which order would they appear on top TV chat shows?

These four all featured in a “Secure Investment – 300 per cent returns” email I received. Inevitably, none of these actors has any connection with the sender – the images used are all easy to find publicity pictures – and are unlikely to know how their images have been used.

The stuff of dreams

Before delving deeper, take a look at “Secure Investment – 300 per cent returns”. To multiply your money three times over is the stuff of dreams. Yes, it can happen. But those who make these gains can only do so if they are prepared to take risks. If you want a secure investment, it will be a few percentage points.

The email promises these returns from film investment. But even with major stars, no film is ever secure as a surefire winner – A-listers star in plenty of turkeys. And three times your money? Some great films come out at the wrong moment, clashing with other box office gold, while others become cult films, adored by a discerning section of the public but not popular enough to have mass appeal and big ticket receipts. Many go straight to DVD.

Those behind the venture also say that Matt Damon, Michael Fassbender James Franco and Tom Hanks “are being approached” to appear. The promoters claim that “this film investment represents potentially one of the most lucrative investment opportunities open to private investors, offering the chance to be involved in one of the most anticipated blockbusters of all time. Returns are anticipated to be in excess of 300%”. 

It's good to know the original 300% was conservative.

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What is the film?

But what is this blockbuster? It's about environmental campaigning, worthy but hardly a guaranteed top grosser. It is apparently due for release into cinemas in Easter 2015 which gives seven short months' for writing, casting, location spotting, arranging special effects, shooting, pre-production, post-production, publicity and movie house contracts. Any major film due for release next Easter is already towards the end of the process. Publicists will already be working on it – many glossy magazines are already planning next Easter's editions.

The promoters of this “secure investment” are ecstatic. They say: “There are few industries that can compete with film when it comes to speed and profitability as an investment. Why can Film Investments offer such incredible returns? Many films go on to make their budgets back in incredibly fast time-scales and generate revenues far in excess of expectations – sometimes in thousands of percent.”

But most films don't. The clunkers far outweigh cinema successes.

They forecast $90 million in US box office from this film in the first year. To put that into perspective, the acclaimed 12 Years a Slave took $57 million.

Investors are assured that contracts are drawn up by a Solicitors Regulatory Authority (SRA) lawyer. So what? Just because a qualified solicitor has worked on the paperwork does not make it a sure bet to treble your money.

In any case, this film has been seeking finance for at least a year – in late 2013, it wanted $60 million. Now it's a more modest $30 million. But it is projected to bring in a very precise $705,640,227 world wide. How can anyone make that assertion?

The film is covered by “triple-A insurance” (whatever that means – it is unclear what the policy is actually for) while funds are secure in an “FCA Regulated Escrow” but again, that is no guarantee of investment success. It simply means that monies can only be drawn upon for the purpose of the production and not spent at the local racetrack. It could mean big money for the promoters upfront.

Film is fascinating. Film is fun. But investing in it is anything but a sure thing. If you want to double your money with films, then sign up to Orange Wednesdays (now with phone company EE) and you'll get a free cinema ticket when you pay for one. By my reckoning, that's a 100%, risk-free winner.

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